Why Needham Likes Cloud Stock Anaplan In 2021

Cloud-based software stocks have done well amid the work-from-home and study-from-home environment necessitated by the COVID-19 pandemic in 2020.

Despite the pricier valuation of the category, an analyst at Needham picked one of the stocks as a recovery play in 2021.

The Anaplan Analyst: Needham analyst Scott Berg has a Buy rating on Anaplan Inc PLAN shares and hiked the price target from $85 to $95.

The analyst also named Anaplan as Needham's 2021 best idea and added it to the firm's Conviction List.

Related Link: Zscaler, CrowdStrike Hit New Highs After Stellar Quarters: What The Sell-Side Says

The Anaplan Thesis: Demand for Anaplan's Planning platform is set to climb in 2021 amid efforts by companies to free up time and resources to replace legacy solutions that were ill-equipped to deliver business data during the most critical time periods in the pandemic, Berg said in a Monday note.

Due to frustrations with existing planning technologies and processing, companies are now increasingly looking up to modern planning solutions such as that of Anaplan, the analyst said. 

While 2020 was more about upsell, 2021 will see the return of new logo growth, he said.

"We believe the improving demand will combine with a more profitable operating model and a compelling valuation (following a year of relative underperformance) to set up PLAN shares for outperformance versus our broader universe in 2021." 

PLAN Price Action: At last check, Anaplan shares were advancing 1.24% at $73.62. 

Related Link: Why This Wedbush Analyst Expects A Year-End Tech Rally

Posted In: cloudNeedhamScott BergAnalyst ColorPrice TargetReiterationAnalyst Ratings

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.